Samsung finds labor violations at Chinese suppliers

Michael Kan |
July 2, 2014

Samsung had been stepping up oversight of its China-based suppliers, following complaints from labor groups.

Dozens of China-based suppliers to Samsung Electronics violated various labor regulations last year, including failing to pay overtime wages and provide proper safety equipment for workers, according to recent audits.

In a report Monday, the Korean electronics maker revealed some of its progress in keeping company suppliers in line with labor codes. Back in November 2012, Samsung announced it would address ongoing labor violations at the China-based manufacturers after a labor watchdog group accused one of the suppliers of using child workers.

Samsung's latest sustainability report said no suppliers had been found hiring children, but audits conducted last year showed that labor-related problems still remain.

A third-party audit of 100 China-based suppliers found that 59 of them had failed to provide or ensure that workers were using proper safety gear, according to the report. In addition, 39 suppliers excluded the overtime pay when giving out wages to part-time workers.

"A majority of suppliers do not comply with China's legally permitted overtime hours," the report said. Chinese law limits the work week to 49 hours, but most factories in the country let employees work far longer, in return for overtime pay.

Samsung added that its own, more expansive, investigation of 200 China-based suppliers found similar problems dealing with payment of wages, and controlling of working hours. Past reports from watchdog groups have alleged workers at Samsung suppliers can log as many 15 to 16 hours in a single day.

To correct the problems, Samsung has demanded that suppliers in violation should take action. Suppliers that fail to do so, will face penalties, including receiving fewer orders from Samsung, or even face suspension of business. But it's unclear if any Samsung suppliers were sanctioned after the recent audits.

Both Samsung and Apple have been stepping up oversight of their China-based suppliers, following complaints about the facilities from labor watchdog groups. In Samsung's case, the company plans to more strictly limit overtime hours by the end of this year. But watchdog groups believe the bigger priority is raising the workers' pay.